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Mad Money

News/Business. (2013)

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Cramer 11, Collins 11, Dell 9, Us 8, Jim 7, America 5, Tyco 4, Texas 3, Honeywell 3, Austin 3, Mulligan 3, Boris 3, Warren Buffett 3, New York 2, Etf 2, S&p 2, Officemax 2, Buk 2, Tamiflu 2, Utica 2,
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  CNBC    Mad Money    News/Business.  (2013)  

    February 19, 2013
    11:00 - 12:00am EST  

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is bigger than we think ... sometimelike the flu.fer from with aches, fever and chills- the flu's a really big deal. so why treat it like it's a little cold? there's something that works differently than over-the-counter remedies. prescription tamiflu attacks the flu virus at its source. so don't wait. call your doctor right away. tamiflu is prescription medicine for treating the flu in adults and children one year and older whose flu symptoms started within the last two days. before taking tamiflu tell your doctor if you're pregnant, rsinrious health conditions, or take other medicines. if you develop an allergic reaction, a severe rash, or signs of unusual behavior, stop taking tamiflu and call your doctor immediately. children and adolescents in particular may be at an
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increased risk of seizures, confusion or abnormal behavior. the most common side effects are mild to moderate nausea and vomiting. the flu comes on fast, so ask your doctor about tamiflu. prescription for flu. but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business. i'm jim cramer. welcome to my world. >> you need to get in the game! >> firms are going to go out of business and he's nuts. they're nuts. they know nothing. i always like to say there's a bull market somewhere.
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>> "mad money," you can't afford to miss it. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm trying to educate and teach, so call me at 1-800-743-cnbc. people like to fight the tape. even on a terrific day like today. the s&p vaulting 7.3%, and the nasdaq climbed 0.68%. >> house of pleasure. it's a natural instinct to fight given how immediate our fights have been, but buy the dips, sell the rips attitude has been the way to go. the way to win since 2000, but it sure isn't winning now. you sold the rips, you sold a ton of stocks a long time ago. you don't have any stocks left. but the charts are breathtaking
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with breakout all over the place, housing, hotels, lumbers, semiconductor, construction, cable tv, entertainment, packaging, chemicals, drugs, biotech, retailers, rails, you name it, even the lack to pause to refuel is as unprecedented as i've seen in all my years of investing. no retin-a in sight here. it's as if there's a supply shortage at these levels with no stock to be found. everyone's afraid to short now, so the buyers keeping reaching and reaching for more. the rips have been sold and resold. it doesn't matter. the dip buyers have been left at the altar, or you could argue for the slaughter. if this market doesn't do some tumbling to catch its breath, so certainly not breadth with a "d" which it has it in spades,
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hearts, diamonds and clubs. everything pales in comparison to what's driving so much of this market behind the scene. that's the urge to merge. the rush to get married, even the desire to elope on weekends, especially the three-dayers, something we haven't seen in ages. i guess we shouldn't be surprised when we learned yesterday officemax and office depot are trying to merge. >> that was easy. in 1997, the government fought staples from acquiring office depot because of anticompetitive concerns. these days it might be vital to let them merge to keep them both in the game. it's become the mainstay for walmart, best buy, and where i get my stuff -- costco. the justice department seems as pro-merger as any administration that i've ever seen.
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like so many other stocks that have gotten bids, these two names have been huge winners. officemax has doubled since august, but office depot had tripled in that time. during the sell the rip days, most of these would have been sold and shorted, but the principal clients of these places, small businesses, aren't they supposed to be dying on the vine? isn't president obama squelching the small business job creator? the republicans like to say that. maybe or maybe just isn't squelching hard enough. otherwise you wouldn't be seeing such monster moves. in other words, business is strong enough to merit companies talking to each other about combining rather than thinking if you stick around and compete, it's almost a matter of time before the other guy keels over. the last man standing game seems like it's history. maybe this is a merger between two companies who failed to keel over. more important, though, it's a merger born of confidence, confidence that despite the runs in the stocks there's much more upside, because things are just plain better than we might
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realize. even though the stocks are up from where they were, they're still down huge from when times are good. that's the theme behind almost all the deals we've seen, all the ones worth talking about, it's the commonalty of the breathtaking number of takeovers, in a world where they were supposed to have fizzled like last year rather than ratcheting up as seems to be the case now. all right. let's start with heinz. i don't know if your super market carries this same one. it's the are you ready skee-daddy version. what got me about this deal is not that warren buffett saw the intelligence of buying a brand that means ketchup worldwide, but that it didn't happen a long time ago. here's heinz increasing earnings per share, expanding internationally, yet kept down by a frozen food division or slowing restaurant economy. the darn thing has been ripe for the taking for years and years. it always amazed me it hadn't
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been taken before. the bears chide optimists, lacking in rigor, yet when i questioned why a goldman sachs analyst would put a sell on a great company like heinz, nobody else seemed to think it was odd at all. we've been zero-summing here for ages, and if they're reaching for manitowoc and terex, not just caterpillar and deere, now you know it's time to rotate out of heinz. don't we like sell sell sell when we buy buy buy. isn't that the plan? i don't know. that's not the plan for everybody. warren buffett, he doesn't care about sector rotations. he cares about acquires brands, lasting brands for less, some sort of consummate wholesale buyer likes brands for less. now it's his. who was really complacent here? i say it was the goldman analysts, not the buyers.
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how about dell? you really think that dell, which supported slightly better than expected numbers, is that that much better than heinz? once again, here's the stock that's been left for dead. nobody even cares, maybe nobody pronounced it dead, yet it simply refused to die, too much cash, too much cunning. heinz has flatlined for a long time. dell has been going down. you know who cared? michael dell cared, and now he's in a huge fight over pennies on the dollar. dell will get his man, because alas his man is dell. virgin media, third biggest deal of the year is once again emblematic of the flaw of the sell the rip strategy, virgin had already ripped and ripped big before it got its bid from liberty. the odds-on move would have been to short this stock, especially in light of weakness at news
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corps similar properties. who's to argue with john malone? that's like arguing with michael dell or warren buffett. a trio of billionaires. certainly no more than i want to argue with billionaire rich kinder, who is taking advantage of the market's ridiculously low valuation of oil in the ground versus what you're paying at the pump. in order to steal copono, or maybe you want a slugfest or give a lecture to larry ellison for his bizarre purchase of acme packet, a telco stock that had been a free fire zone stock for as long as i can remember. it had been a virtual short sell. i don't feel like arguing with ellison any more than i want to argue with kinder or dell or malone or buffett. i do want to find the stocks that the next billionaires are intent on purchasing. when the richer buying, it makes me a heck of a lot more confident. do you mind if i throw in brian roberts, buying the rest of nbc universal, ahead of when he had to.
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i don't feel like arguing him, because i work for him, but more importantly because i respect him. they don't like to part with a nickel unless they can make a dime off of it. you can see what's happening here. tax is behind us, the sequester bark worse than the bite, if there even will be one, and confidence is back, particularly among those with dollars to back it up. i know the first person to say r.i.p. to sell the rips will be hit with a gigantic sell-off. waiting for a dip in the face of a pool of liquidity brought on by the firehoses of buffett, dell, ellison, kinder, malone, roberts, it's like waiting for the pacific to run dry. i would rather join them. andrew in virginia. >> caller: did you see the solar panel outfit in the evening
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ball? >> no, i read the speech. i'm sure she looked dynamite. are you allowed to say that? i take it back if it's incorrect. >> caller: no, obama likes solar for u.s. economic reconstruction, and energy holdings recently made the largest national investment in solar at $2 billion. are sety and sbwr good to buy? >> sbwr i'm not that crazy about. solar city i have to do work on. you know, it was my birthday recently. my kids said happy birthday, you got to get a solar panel. it's like solar city, like circuit -- i don't want to do that, but how about party city? that's not there, either. but i will tell you that i think the solar city is on to something. if you can get money to put a solar panel on and cut my electric bill, you would be plenty happy. matt in texas, matt? >> hi, jim. boo-yah from austin.
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>> man, austin, we had such a great time when we were in austin, at u.t. it was fantastic. what's up? >> caller: hey, i'm a longtime shareholder of unh. despite, due to medicare, is a small book of business, which is down over 6%. do you think you have growth strategy, and in particular international expansion or enough to offset obamacare? >> no, no, these stocks open down and down big. you get this medicare advantage, and they're going to cut it by that much, the stocks will be for sale. there's so many others, take the money out, buy cardinal health. you know, that's what's going to happen. anyway, some might be tempted to fight the tape. i know my friend doug cass going back and forth with me, he's a fighter, but why fight it? when you're fighting guys like buffett and dell and anderson,
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kinder, malone and roberts, man, they would be rich. just doesn't make sense to me. i say join them. "mad money" will be right back. coming up, losing luster? central banks the world over have their printing presses working around the clock, but while gold has provided cover in the past, has this precious moment passed, or will it shine again? cramer checks the technicals when he goes off the charts. and later, change the locks? record low rates have reignited the housing market. investors are cashing in. could adt help keep your portfolio as secure as your home? cramer is unlocking the answer, just ahead. plus bright idea? cheap domestic energy is causing industry to reinvest in america, and as manufacturing ramps up, so do the demands for power. don't miss cramer's exclusive with the ceo of american electric power to find out if it
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could give you a charge. all coming up on "mad money." don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, hashtag madtweets. send jim an e-mail to madmoney@cnbc.com, or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com.
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what the heck is happening with this vicious decline in gold? and what are we supposed to do about it? okay. tonight we're going off the charts to answer that question with the help of tim collins, a brilliant technician and my colleague at realmoney.com, which you can find by going to thestreet.com. you know i've been fond of gold as an asset class. i think it's an essential part of a well-balanced diversified portfolio. lately the price of gold feels like it's fallen off a cliff.
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even though i think you should always own some gold, i'm not backing away from that, collins suggested this is a time when you should think about owning less of the shiny stuff. what's wrong with the precious metal? take a look at the daily chart of the gld. it does a terrific job of mirroring the price of gold. for collins, this is a picture of a textbook example of what happens when a powerfully bullish long-term trend suddenly loses its mojo. up until this past october gold has been a raging bull market, for over five years. and whenever you get that kind of trend, pretty much, well, people buy every single dip. they do it because it works. for years it was a winning strategy, then the trend changes like we saw with gold in october. those same dip buyers, sheesh,
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they're getting slaughtered. gold's bullish up trend went away, but the dip buyers, they refused to give up. what you're seeing is the repetitive pattern of bull traps that keep getting set. just since december alone collins says we've found four trap patterns, one after another after another after another. you get a major sell-off with a big volume with an oversold reading and the two big momentum indicators at the bottom of the chart? the relative strength index, we call that the rsi. and the stochastics. at the short-term low, the price will test a key support level. that's what happens. that's when the dip buyers sweep in. think about it. each time instead of bouncing, the gld just gets hit with still one more sell-off. look at this. it tries to bounce and can't. tries to bounce, can't.
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tries to bounce, but can't. collins thinks gold has fallen so far so fast it could be due for a 3% to 4% bounce sometimes in the near future. that said, collins does not think the bounce is buyable. as a matter of fact it's sellable. so let's look at the longer-term weekly chart. after rallying for year after year over the last 12 months or so, gold has been trading sideways, having formed, wow, here's a new one, a failed cup and handle pattern. it's called that, when a cup and handle comes together correctly it's indeed one of the most bullish formations. i'm not kidding. with gold the pattern failed. all it gives us is a broken piece of pottery. a crock, so to speak. now, with the broken cup and handle collins think the gld is
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stuck trading sideways. and as long as gld is stuck in this 150 to 175 range, he will endorse it only for trade, not for investment. the reason? this chart says there's no advantage to going long. how it breaks down below 150, then collins think you need to hedge your gold position or short some. this is going to lower. on the other hand, if they can move up over 175, but would be a buy, it's that simple for collins, as long as the gld is caught between 150 and 175, he thinks you need to respect the rage and realize the bulls nor the bears have a long-term advantage. even when he do the math on the super long-term monthly chart, you can see the same pattern, this 150, 175 range keeps gold contained, for collins'
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purposes, gold as might as well be in limbo. no edge. given gld's recent performance, collins thinks it makes more sense to be cautious rather than simply neutral. but as much as the gld might seem to be in a difficult spot right now, collins points out it's the single best way to play gold if you still insist on playing gold, like i think you have to. check this out compared to some of the miners. barrick and agnico eagle, as well as the market vectors gold miners etf, gdx, and the absolutely hideous junior gold miners etf, the gdxj. if you want exposure to gold in this environment, this chart makes it crystal clear that the gld remains the only way to go. this is just terrible action, not only has it held up much
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better than the big miners, but it has also had much less volatility. collins think the loss has done more damage to the mining stocks than the price of gold. in other words the miners have a harder time shaking off than the gld itself. he also nodes when it goes higher, they go up about the same amount. so the gld has much more upside. this is what we've been telling you for ages. collins has given you the empirical proof you need in the form of the charts. he looked through the largest gold miners and couldn't find a single outperformer in the group. they are the worst stocks at a good time for stocks. the bottom line, i've been a gold bull for ages. that said, based on the charts as interpreted by tim collins, it might not be the right time to add to your position. you need it as insurance. it goes up when everything else is going down and gold is a currency.
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if you're overweight gold, you have to look at these charts, it wouldn't be crazy to trim back your position a bit, and move some of that money into something with more short-term upside. wow. stay with cramer. coming up, change the locks? record low rates have reignited the housing market and investors are cashing in. could adt help keep your portfolio secure as your home? cramer is unlocking the answer, just ahead.
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the people of bp made a commitment to the gulf., and every day since, we've worked hard to keep it. today, the beaches and gulf are open for everyone to enjoy. we've shared what we've learned, so we can all produce energy more safely. bp's also committed to america. we support nearly two-hundred-fifty thousand jobs and invest more here than anywhere else. we're working to fuel america for generations to come. our commitment has never been stronger. more "likes." more tweets. so, beginning today, my son brock and his whole team will be our new senior social media strategists. any questions? since we make radiator valves wouldn't it be better if we just let fedex help us to expand to new markets? hmm gotta admit that's better than a few "likes." i don't have the door code. who's that? he won a contest online to be ceo for the day. how am i supposed to run a business here without an office?! [ male announcer ] fast, reliable deliveries worldwide.
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fedex. do you ever come out the first weekend after valentine's day, i have some dating advice for your portfolio just like when you're on the prowl for new stocks, look for the stocks of companies that have recently been broken up with. why? those are the stocks where you're most likely to get lucky, financially speaking. companies in the process of splitting can be big winners but after the breakup, that's where the big money may be. as long as you back the right horses, which brings me to tyco, the classic business that came -- turning into what i
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would describe as a richard nixon-like pitiful helpless giants. that's why nearly six years tyco spun off the health care business, as covidien, and spun off its electronics business as t.e. connectivity, which has been nothing short of spectacular. last september it broke itself up again, it merged with pentair, and for more important for our purposes, it spun off the north american residential security division as the adt corporation. it started trading as an independent company at $36 a share. since then the stock has roared higher. okay. it's rallied more than 30%. ♪ hallelujah back in january mike in new york asked us about adt, and if it would run out of steam since the spin-off.
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adt is up less than a buck in the time mike asked us about it, so has adt run out of steam? did the stock only have enough fuel go higher, or is there a long-term story here? i'll give you a hint. my charitable trust, which you can follow along at actionalertsplus.com owns adt. that's how much stephanie link, my comanager, and i like it. before the spin-off, tyco managed it as what i would describe as a cash cow to finance its other businesses. now adt can use its own cash. however, the most important factor here is adt is a play on the bountiful, amazing, still-on housing recovery. that's one of the strongest themes in 2013 and beyond. every time we get a piece of positive housing data, we know
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the homebuilders benefit, but i think the ancillary plays might be better opportunities, including adt. it's the largest residential and small business security company in north america. they provide everything from home monitoring services to prevent burglary, to fire alarms and carbon monoxide detectors. this is a $13 billion business and adt is the number one player. not only is adt the biggest name in safety and security, it's also really the only pure play out there, making it a prime target for a takeover. i could see a honeywell or united technologies ultimately making a bid for this company. that would be merely icing on the cake for me. i would prefer to see them buy other companies in its own line of work to consolidate a fragmented industry. we never speculate unless the underlying fundamentals are real good, and in adt's case, the fundamentals are excellent.
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glory be, i love these kinds of businesses, 90% of its revenues are recurring. 92% in the most recent quarter. customers who want adt security ystems sign up for three-year contracts, and once installed it's hard to switch to another service. they have superior products and can offer at a cheaper price, because the scale is so much larger than the competition. it's expanding its offerings beyond its core businesses. now they're doing medical alerts, remote video monitoring, as well as lighting and other systems. and then there's pulse, it keeps coming back to pulse, an interactive remote home monitoring system. pulse lets you monitor your home via the web or the smart phone, your ipad, giving you the ability to lock the doors, and even control the lighting.
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monitor for prowlers from often thousands of miles away. this is a much more expensive than the basic security package and the company is trying to get customers to switch to pulse. right now only 3% of customers use the pulse system, but in the most recent quarter, it represented 18% of what they sold. so this thing is taking off in a major way. you ought to change your website. you don't make it nearly as exciting as i make it. they're paying down debt and paying off shareholders. a whopping $1.9 million left in the buyback authorization. and adt plans to spend all the money in the next three years. even better, when the company last reported at the end of january, management announced an accelerated buyback program. you know, i'm calling that the equivalent of a called shot,
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with management basically coming out and telling you they think their stock is too darn cheap, and they're going to take it anyway. right here. they can't take how low their stock is. we expect more buybacks to be announced after they're done with this current accelerated program. they're going to shrink the flow, but the latest quarter was excellent, even though the headline numbers didn't look like anything to write home about. rising just 1.8%, but below the surface, the earnings before interest and taxes, they were better than expected. that income rose 12.9%, beating the analysts expectations by 4%, attrition, the percentage of customers they lost was flat. the company added 257,000 new customers. meanwhile, adt's margins expanded. they should only get bigger down the road.
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here's the bottom line -- adt may have run up a lot since it was spun off from tyco in the fall, but i think this post-breakup story is just getting started. adt is a terrific pure play security company that i think is a terrific way to play the housing rebound, so i have to believe like i do about housing in general that there's much more room to run. let's go to paul in ohio. paul? >> caller: hey, cramer glad to you to talk to you. >> same. >> caller: i got some honeywell stock, about 220 shares. it's gone up like the highest i've seen it in a while. first, i'm 67 1/2 years old, so i want to get rid of some stock before i turn 70 1/2 and have to go minimum distribution. so i'm thinking of selling half or so this year, half next year. is this a good time to sell? >> i think honeywell is going higher.
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it's had a good run. you have a particular situation that seems to me it lends itself to selling. but if you have another stock to sell, i would do that. i think they're doing such a good job. somebody ring the alarm. adt is getting steaming hot. if you're looking for a play on the housing market, adt is a terrific security company that should continue to see a ton of upside. don't move, lightning round is next. jim cramer, you're one of my heroes. >> i look forward to your show every weeknight. >> thank you for helping beginning investors like me. >> when you talk about the market, i believe you're spot on. >> i love it. every night we watch you, and i have learned and earned. ♪
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it is time. it is time for the lightning round. you call in with a stock and i
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say sell sell sell. and every time i play this sound, and then the lightning round is over. are you ready skee-daddy? time for the lightning round. starting with hope in new york. hope? >> caller: hi, cramer. >> what's up, hope. >> caller: how are you? i'm good, thank you. i'd like your thoughts on trulia. >> it's a housing play. they like realogy and zillow, which had a good quarter. i still prefer realogy. pete in georgia? >> caller: thanks for taking my call, a panamanian bank, it advances money for groups. blx banco latin america. >> i have to tell you, i'm so inclined to like latin america. i think that's an interesting bank, but you know where i'm going to send you?
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bbva, i think that's better, plus they have a great texas business. that's the bank to be in. jim? >> caller: thanks for taking my call, how about imax? >> i don't know if i want to pay a 52-week high, because i don't know what the schedule is for 3-d. i congratulate the company, but let's wait for a pullback. let's go to norm in vermont. >> caller: hey, jim, this is norm from montpelier, vermont. >> what's going on? >> caller: well, it's cold. i bought green mountain coffee roasters at $24 about six months ago. >> wow. >> caller: what's your opinion going forward with green mountain? >> i want you to take half of it off the table tomorrow and let the rest run. when you catch a double in a controversial stock like that, and it is controversial, i want you to take half and play with
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house money. jack in pennsylvania? >> caller: i'm from your home state of pennsylvania. >> how are you? >> caller: very well, thanks. i'm well aware of your admonition that hogs get slaughtered. with that in mind, i'd like your take on nly. >> i think earnings will be under pressure there for a while because of the way that the yield curve is. i know sydney wrote about it, probably the greatest book in the world, but boy, is it boring. it reminds me that nly will struggle here. that said, i think you should hold on to it. even if they cut the dividend a couple times, it's still a good stock. dan in florida. >> caller: dr. cramer, how are you doing? >> i am good. >> caller: i have a problem here. i need some help. i'm looking at cisco, csco, but i'm torn between that and hewlett-packard. >> i'm going to make this easy. hewlett-packard is trying to make a comeback. cisco reported a great quarter.
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and sure enough i'm like this is a good call, and stephanie called me and said -- and you know what? people didn't like it. upon further review, it was a good quarter, and i think people should step up to the plate and buy it. one more. rick in california? >> caller: boo-boo boo-boo ya jim. rick in lake isabella. >> nice. cell stocks. >> caller: amt in particular. >> this group has doled into its own personal bear market. the short sellers are piling in, because they think the chart is bad. i will say stick with american tower, and stick with cramer! the lightning round is sponsored by t.d. ameritrade. coming up, bright idea? cheap domestic energy is causing industry to reinvest in america. and as manufacturing ramps up, so do the demands for power.
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don's miss cramer's exclusive with the ceo of american electric power to find out if it could give you a charge.
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we've got a north american energy renaissance going on right now, with the country now producing more oil and natural gas than we actually know what to do with, but what does that mean for the other fossil fuel, the one that's hated by environmentalists worldwide? i'm talking coal. coal is no longer king when it comes to power generation. power generation from coal is now almost equal to what we get from natural gas. the swing is not because natural gas has become too cheap, consider aep, the utility with the largest electrical transmission in the nation, as well as being the biggest burner of coal. i've always liked it. it has a sweet 4.1% yield and a terrific new dividend policy makes me like it more.
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it's turning the power generation business into an unregulated utility. the company got 71 march from last year. it depends on the most hated fuel in the nation, though less than we feared. aep reported last friday that between now and 2020 they're going to have to spend 4 to 5 billion upgrading the coal plants to keep up with the new and existing regulations, though as of late the epa has learned that ratepayers can't bear shutting plants. that's a big reason why it's moving toward using less coal, so let's check in nick akins. he's the ceo. welcome back to "mad money." >> jim, great to be with you again. >> i got to tell you, this was the most upbeat i've ever heard you. you have increased your dividend rate that you want to give. you've solidified a 4 to 6% growth rate. why is everything breaking your
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way right now? >> oh, i think we spent 2012 clearing the decks of a lot of risk in the corporation. the ohio situation we talked about earlier, certainly getting some of the power plant activity done, but we're also seeing the economy start to stabilize somewhat. we're hopeful it would pick up during '13. >> is that one of the reasons you took the extraordinary step of increasing the payout, now 60% to 70%? already you've been a terrific payer of dividends. >> oh, yeah, we raised that dividend range, because we felt like we're going to be a regulated utility in the future, it produces that benefit going forward, so we really believe we're working well in that regulated space. >> now you mentioned that you have increased confidence about the businesses. in your area, one of the things i thought was most exciting, and you pointed out many times in a terrific, terrific transcript, that you are actual big beneficiaries of this -- all the
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shale, like when we were out in ohio and utica. you are a winner given the big industrial re-renaissance we're having because of oil and gas? >> absolutely, jim. we're seeing the eagleford shale in texas take off. utica shale in ohio, as a matter of fact that's been our saving grace in this period where the industrials, particularly on the primary metal side, has been challenged. our service territory is well positioned to take advantage of any renaissance. >> when we were at timkin, they were talking about the cheap power they could have and you're a significant reason that companies do want to come back to america, this reindustrialization is bringing companies back from countries where the energy is expensive. >> absolutely. the shale gas activity has allowed us to move back and forth from a fuel perspective from coal versus gas depending on the pricing. it's been a distinct advantage for our customers.
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>> now, you also, i think this is a point i've got to make -- you talk about how the epa has seemed to have understood at last your notion that the poor and middle class people are impacted more by increases than anyone else, and maybe they want to start factoring in the impoverishment of the poor people in your area before jacking up how much you have to spend to meet the new regulations. >> yeah, jim, as you said, we're spending between $4 to $5 billion on environmental retrofitting of our equipment. if they add greenhouse gas emissions on top of that during this time when the states are already dealing with the cost increases associated with those projects, that's a highly regressive increase in pricing. as you know, electric utility supply is highly regressive when you have price increases, and the poor and middle class will feel the effects.
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it's important for us to get that transition right and make sure we are advancing in a positive fashion on a path that doesn't impair the economy and doesn't inordinately increase prices for customers. >> at the same time we should point out that you have lowered your emissions for sulfur dioxide, for nitrous oxide. it's not like you've been doing nothing with coal. you've been cutting the emissions pretty continually. >> that's right we've reduced the emissions by over 80 to 90% over the decade. and we've had the co-benefit of reducing mercury by 85%. when you look at the latest rules that are in place, we're going to achieve further reductions, so you want to make sure that process is done over time. we're going tore retiring generation in the 2014, 2015, 2016 time frame, and you retire that coal fired generation, you'll have the immediate benefits of greenhouse gas
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reductions. we're already on target, the industry is, of meeting those emission reductions that were proposed in the waxman/markey legislation, 17% by 2020. we're on path of that just with the shale gas opportunity in front of us. >> i think you're doing the impossible, by keep everything happy. far less risk for any of those stocks in that index. thank you mr. akins, for being on the show. >> thank you, jim. guys, increased dividend payout coming, 52-week high, less risk, doing a lot of things right for even the environmentals that have taken a notice. what can i say? this is why i like a stock like american electric power for your portfolio. the ceo doing a great job. stay with cramer. [ engine revving ]
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you always hear people say i'll buy that on a pullback. i say it, too. the results have been mixed at best, but one thing is for certain, people are way too gun-shy to use it. google powered through today. so many wish they were in google. it's the score of a lifetime, but when this terrific
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search-and-destroy the competition juggernaut fell last year after reporting a miss and gave uncertain guidance, did you use that pullback to buy, or did that move scare the wits out of you? did you use the further pullback another 50 points to put money to work in google? or was that sell-off another one you had to avoid even as you might have been waiting for another leg down? you're waiting for a further pullback. i think the answer is the pullback was wasted on many. it seems like the great growth days were behind them. there were more moving parts where the cost of acquisition continued spending on uncertain products, all you had in retrospect was the pullback you needed. the one that might have been waiting for, at least making
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matters worse, second pullback created what could have been a nasty-looking head and shoulders pattern. as the technical signal a mountainous top if they didn't hold. it turns out the stock did stop going down, the ship righted itself, the company developed a host of new products, and the continuation of the excellent android operating system. that's just around the corner. hey, whenever they want it to. not only that, but now google has become the new apple, with a sense of excitement, extending the company's dominance to other areas. what's amazing is while a hedge fund dukes it out, google is giving us growth via its huge pile of cash. that's all that anyone really wants. growth, as we know, it comes
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from stagnant growth at microsoft and intel, despite their attractive dividends like the one david einhorn is merging, though he wants it in a preferred form, just doesn't intrigue us. here's the real kicker. when google broke down, we just saw a shrinking of the price to earnings multiple which was lower than the average stock in the s&p 500. you've got the highest quality growth stock around for one of the lowest multiples in book, where companies like general mills or johnson & johnson, dramatically subpar growth, but traded at much higher multiples as google did at the bottom, or general mills even at the top. the lesson -- when you a pullback without a concomitant slashing of earnings, perhaps you should take advantage of it. don't fear what you've been waiting for as the run to $800 shows. that's how the biggest money is ultimately made. stick with cramer.
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